Question 1

A perfectly competitive firm has​

Accepted Answer

A) ​A perfectly elastic demand for its products 
B) A perfectly inelastic demand for its products 
C) A downward sloping demand for its products 
D) ​None of the above 
A) ​A perfectly elastic demand for its products 
B) A perfectly inelastic demand for its products 
C) A downward sloping demand for its products 
D) ​None of the above

Question 2

​In equilibrium,low risk assets earn a _______return than high risk assets

Accepted Answer

A) ​higher 
B) lower 
C) similar 
D) ​none of the above 
A) ​higher 
B) lower 
C) similar 
D) ​none of the above

Question 3

​A market tends to be monopolistic if

Accepted Answer

A) ​The good has too many substitutes 
B) The good has very few substitutes 
C) There are too many rivals 
D) ​The good has too few complements 
A) ​The good has too many substitutes 
B) The good has very few substitutes 
C) There are too many rivals 
D) ​The good has too few complements

Question 4

​All of these are characteristics of a competitive industry,except:

Accepted Answer

A) ​Many substitutes 
B) No barriers to entry 
C) Homogenous product 
D) ​Little or no information on rivals' products 
A) ​Many substitutes 
B) No barriers to entry 
C) Homogenous product 
D) ​Little or no information on rivals' products

Question 5

​A small town in West Texas has one gas station.If the price of oil increases,the price of gas that the station charges will most likely

Accepted Answer

A) ​increase. 
B) decrease. 
C) remains the same. 
D) ​may increase or decrease. 
A) ​increase. 
B) decrease. 
C) remains the same. 
D) ​may increase or decrease.

Question 6

​Which of the following cannot be classified as a market structure?

Accepted Answer

A) ​Perfect Competition 
B) Monopoly 
C) All of the above 
D) ​None of the above 
A) ​Perfect Competition 
B) Monopoly 
C) All of the above 
D) ​None of the above

Question 7

​A sudden rise in the market demand in a competitive industry leads to

Accepted Answer

A) ​A short run market equilibrium price lower than the original equilibrium 
B) A market equilibrium higher than the short run price 
C) Entry of new firms into the market 
D) ​All of the above 
A) ​A short run market equilibrium price lower than the original equilibrium 
B) A market equilibrium higher than the short run price 
C) Entry of new firms into the market 
D) ​All of the above

Question 8

In equilibrium,high risk stocks would typically be accompanied by​

Accepted Answer

A) ​low returns 
B) no returns 
C) high returns 
D) ​no sales-no one would buy risky stocks 
A) ​low returns 
B) no returns 
C) high returns 
D) ​no sales-no one would buy risky stocks

Question 9

​A monopoly firm is a ______________ and faces a __________ sloping demand curve.

Accepted Answer

A) ​Price taker;horizontal 
B) Price maker;horizontal 
C) Price maker;downward 
D) ​Price taker;downward 
A) ​Price taker;horizontal 
B) Price maker;horizontal 
C) Price maker;downward 
D) ​Price taker;downward

Question 10

​Profits of a monopoly are driven to zero

Accepted Answer

A) ​Immediately in the short-run as assets freely move from low-valued uses to high-valued uses instantly 
B) In the long run because the demand curve becomes more inelastic 
C) In the long run because the assets eventually move from low to high valued use 
D) ​In the short run because the demand curve becomes more elastic 
A) ​Immediately in the short-run as assets freely move from low-valued uses to high-valued uses instantly 
B) In the long run because the demand curve becomes more inelastic 
C) In the long run because the assets eventually move from low to high valued use 
D) ​In the short run because the demand curve becomes more elastic

Question 11

Two cities face identical prices for their housing.City A decided to be a pollution free city "Clean town" and all the factories would locate in city B "Smogville",we expect the prices of housing in city A "Clean town" to​

Accepted Answer

A) ​increase 
B) decrease 
C) stay the same 
D) ​none of the above 
A) ​increase 
B) decrease 
C) stay the same 
D) ​none of the above

Question 12

In a monopoly​

Accepted Answer

A) ​the industry has high barriers to entry 
B) the industry has high barriers to exit 
C) the industry has high barriers to entry and exit 
D) ​the industry has no barriers to entry or exit 
A) ​the industry has high barriers to entry 
B) the industry has high barriers to exit 
C) the industry has high barriers to entry and exit 
D) ​the industry has no barriers to entry or exit

Question 13

​Generic Drug Industry Dynamics
When a brand name drug's patent protection expires,many generic producers are usually ready to enter the market.These firms' products are close substitutes,they have similar production technologies,the regulatory hurdles to enter are not so great,and,within a few months,there are plenty of rivals.What would you predict for the profitability during these first few months after generic drug entry?

Accepted Answer

These conditions describe an industry th

Question 14

​A sudden fall in the market demand in a competitive industry leads to

Accepted Answer

A) ​A short run market equilibrium price higher than the original equilibrium 
B) A market equilibrium price higher than the short run price 
C) New firms entering the market 
D) ​All of the above 
A) ​A short run market equilibrium price higher than the original equilibrium 
B) A market equilibrium price higher than the short run price 
C) New firms entering the market 
D) ​All of the above

Question 15

​In the long run,if housing prices are higher in San Diego,California,versus Nashville,Tennessee,then

Accepted Answer

A) ​individuals would move to Nashville 
B) individuals would move San Diego 
C) there would be no movement across the two cities,since the difference in prices is pure compensation for difference in living conditions 
D) ​Both B&C 
A) ​individuals would move to Nashville 
B) individuals would move San Diego 
C) there would be no movement across the two cities,since the difference in prices is pure compensation for difference in living conditions 
D) ​Both B&C

Question 16

​Firemen generally are paid higher wages because

Accepted Answer

A) ​they are usually highly educated 
B) they are usually working under riskier conditions 
C) they are working long and uncertain hours 
D) ​both B&C 
A) ​they are usually highly educated 
B) they are usually working under riskier conditions 
C) they are working long and uncertain hours 
D) ​both B&C

Question 17

​A sudden fall in the market demand in a competitive industry leads to

Accepted Answer

A) ​A short run market equilibrium price lower than the original equilibrium 
B) A market equilibrium price lower than the short run price 
C) New firms entering the market 
D) ​All of the above 
A) ​A short run market equilibrium price lower than the original equilibrium 
B) A market equilibrium price lower than the short run price 
C) New firms entering the market 
D) ​All of the above

Question 18

​A sudden increase in the market demand in a competitive industry leads to

Accepted Answer

A) ​Losses in the short-run and average profits in the long-run 
B) Above average profits in the short-run and average profits in the long-run 
C) New firms being attracted to the industry 
D) ​Both B&C 
A) ​Losses in the short-run and average profits in the long-run 
B) Above average profits in the short-run and average profits in the long-run 
C) New firms being attracted to the industry 
D) ​Both B&C

Question 19

​In a competitive industry

Accepted Answer

A) ​the industry has high barriers to entry 
B) the industry has high barriers to exit 
C) the industry has high barriers to entry and exit 
D) ​the industry has no barriers to entry or exit 
A) ​the industry has high barriers to entry 
B) the industry has high barriers to exit 
C) the industry has high barriers to entry and exit 
D) ​the industry has no barriers to entry or exit

Question 20

​A risk premium is

Accepted Answer

A) ​the difference between the earnings of a low risk asset and a high risk asset 
B) premium paid to a security holder to compensate him for bearing a higher risk 
C) both A&B 
D) ​none of the above 
A) ​the difference between the earnings of a low risk asset and a high risk asset 
B) premium paid to a security holder to compensate him for bearing a higher risk 
C) both A&B 
D) ​none of the above

A perfectly competitive firm has

In equilibrium,low risk assets earn a _______return than high risk assets

A market tends to be monopolistic if

All of these are characteristics of a competitive industry,except:

A small town in West Texas has one gas station.If the price of oil increases,the price of gas that the station charges will most likely

Which of the following cannot be classified as a market structure?

A sudden rise in the market demand in a competitive industry leads to

In equilibrium,high risk stocks would typically be accompanied by

A monopoly firm is a ____ and faces a sloping demand curve.

Profits of a monopoly are driven to zero

Two cities face identical prices for their housing.City A decided to be a pollution free city "Clean town" and all the factories would locate in city B "Smogville",we expect the prices of housing in city A "Clean town" to

In a monopoly

A sudden fall in the market demand in a competitive industry leads to

In the long run,if housing prices are higher in San Diego,California,versus Nashville,Tennessee,then

Firemen generally are paid higher wages because

A sudden fall in the market demand in a competitive industry leads to

A sudden increase in the market demand in a competitive industry leads to

In a competitive industry

A risk premium is

The One Lessor of Business

Benefits, Costs, and Decisions

Extent How Much Decisions

Investment Decisions: Look Ahead and Reason Back

Simple Pricing

Economies of Scale and Scope

Understanding Markets and Industry Changes

Strategy: the Quest to Keep Profit From Eroding

Foreign Exchange, Trade, and Bubbles

More Realistic and Complex Pricing

Direct Price Discrimination

Strategic Games

Bargaining

Making Decisions With Uncertainty

Auctions

The Problem of Adverse Selection

The Problem of Moral Hazard

Getting Employees to Work in the Firms Best Interest

Getting Divisions to Work in the Firms Best Interest

Managing Vertical Relationships

Filters

Exam 8: Market Structure and Long Run Equilibrium

A perfectly competitive firm has​

​In equilibrium,low risk assets earn a _______return than high risk assets

​A market tends to be monopolistic if

​All of these are characteristics of a competitive industry,except:

​A small town in West Texas has one gas station.If the price of oil increases,the price of gas that the station charges will most likely

​Which of the following cannot be classified as a market structure?

​A sudden rise in the market demand in a competitive industry leads to

In equilibrium,high risk stocks would typically be accompanied by​

​A monopoly firm is a ______________ and faces a __________ sloping demand curve.

​Profits of a monopoly are driven to zero

Two cities face identical prices for their housing.City A decided to be a pollution free city "Clean town" and all the factories would locate in city B "Smogville",we expect the prices of housing in city A "Clean town" to​

In a monopoly​

​A sudden fall in the market demand in a competitive industry leads to

​In the long run,if housing prices are higher in San Diego,California,versus Nashville,Tennessee,then

​Firemen generally are paid higher wages because

​A sudden fall in the market demand in a competitive industry leads to

​A sudden increase in the market demand in a competitive industry leads to

​In a competitive industry

​A risk premium is

The One Lessor of Business

Benefits, Costs, and Decisions

Extent How Much Decisions

Investment Decisions: Look Ahead and Reason Back

Simple Pricing

Economies of Scale and Scope

Understanding Markets and Industry Changes

Strategy: the Quest to Keep Profit From Eroding

Foreign Exchange, Trade, and Bubbles

More Realistic and Complex Pricing

Direct Price Discrimination

Strategic Games

Bargaining

Making Decisions With Uncertainty

Auctions

The Problem of Adverse Selection

The Problem of Moral Hazard

Getting Employees to Work in the Firms Best Interest

Getting Divisions to Work in the Firms Best Interest

Managing Vertical Relationships

Filters

A perfectly competitive firm has

In equilibrium,low risk assets earn a _______return than high risk assets

A market tends to be monopolistic if

All of these are characteristics of a competitive industry,except:

A small town in West Texas has one gas station.If the price of oil increases,the price of gas that the station charges will most likely

Which of the following cannot be classified as a market structure?

A sudden rise in the market demand in a competitive industry leads to

In equilibrium,high risk stocks would typically be accompanied by

A monopoly firm is a ____ and faces a sloping demand curve.

Profits of a monopoly are driven to zero

Two cities face identical prices for their housing.City A decided to be a pollution free city "Clean town" and all the factories would locate in city B "Smogville",we expect the prices of housing in city A "Clean town" to

In a monopoly

A sudden fall in the market demand in a competitive industry leads to

In the long run,if housing prices are higher in San Diego,California,versus Nashville,Tennessee,then

Firemen generally are paid higher wages because

A sudden fall in the market demand in a competitive industry leads to

A sudden increase in the market demand in a competitive industry leads to

In a competitive industry

A risk premium is